Published on Sep 9th, 2025 |

Marketing Rule & Recordkeeping Violations | RIA Charged

SEC Releases

Introduction

On September 4, 2025, the SEC issued an administrative order against a $258 Million RIA for multiple compliance violations (Marketing Rule, Books and Records).

The RIA was found to have infringed critical regulations related to:

  • SEC’s Marketing Rule;
  • Recordkeeping obligations;
  • Compliance policy implementation; and
  • Conducting an annual compliance review.

The RIA agreed to pay a $75,000 civil penalty and undertake corrective measures to strengthen its compliance framework.

Violations That Occurred

Violations That Occurred

1. Marketing Rule Failures

  • The RIA published a statement on its public website asserting it “refuse[d] all conflicts of interest,” without any context or substantiation, despite acknowledging conflicts of interest in its Form ADV Part 2A brochure.
  • This violated the Marketing Rule, which prohibits RIAs from including any material statements in advertisements unless the RIA holds a reasonable basis to substantiate them upon demand by the SEC.

2. Books and Records Failures

  • The RIA failed to maintain accurate and current copies of all advertisements on its website.
  • Relying on a Third-Party Service Provider, the RIA lacked the required contractual assurances to retrieve these records promptly upon request, contravening Rule 204‑2(a)(11) under the Advisers Act.

3. Compliance Rule Failures

  • The RIA failed to implement compliance policies as required, specifically, there was no contractual arrangement with its third-party provider to preserve records.
  • The RIA also failed to conduct an Annual review in 2023 and although the RIA knew its Annual Review had not yet been completed, they made no effort to complete the process. This did not comply with the Annual Review requirements set forth in its Compliance Manual.
  • While the RIA did conduct an annual review in 2024 with support from a Compliance Consultant, the 2024 review did not assess the adequacy of their policies and procedures as the review assessed a stale version of the Compliance Manual that was no longer operative and did not capture the requirements of the Marketing Rule.

How Can These Violations Be Prevented?

How Can These Violations Be Prevented?

1. Substantiate Marketing Claims Rigorously

  • Ensure every marketing statement, especially those framing the Firm’s integrity or practices, can be substantiated and documented.
  • Adopt a Marketing Review process that validates such claims before publication.

2. Maintain Robust Recordkeeping Systems

  • Establish clear contractual agreements with Third-Party Vendors, mandating timely access and retention of records.
  • Implement internal auditing systems to regularly verify that all advertisements and marketing content are being captured and archived appropriately.

3. Enforce Comprehensive Compliance Reviews

  • Develop and follow a documented schedule for Annual Reviews of compliance policies.
  • Ensure the review includes up-to-date manuals and assesses both adequacy and effectiveness.
  • Consider periodic testing or Third-Party Compliance Reviews to validate the real-world application of written policies.

4. Appoint and Empower a Chief Compliance Officer (CCO)

  • Assign a dedicated CCO responsible for oversight of marketing, recordkeeping, and compliance reviews.
  • Grant the CCO authority to enforce internal controls and act independently when identifying deficiencies.

5. Train Staff and Monitor Third Parties

  • Conduct on-going training for employees and contractors on regulatory obligations including what constitutes an advertisement, marketing claims standards, and recordkeeping duties.
  • Continuously monitor and audit Third-Party Service Providers to ensure adherence to compliance expectations.

Vigilant's Conclusion

How Vigilant Can Help Prevent These Occurrences

Vigilant adopts a forward-looking, systematic approach tailored to help Firms avoid exactly these pitfalls:

  • Marketing Review
    • Every marketing statement is vetted against robust substantiation protocols, ensuring truthfulness and regulatory alignment.
  • Dynamic Compliance Frameworks
    • Our approach mandates Annual Compliance Reviews that are comprehensive and current, involving both policy assessments and real-world implementation testing.
  • Dedicated Compliance Leadership Support
    • Vigilant helps firms in appointing or strengthening the role of the CCO, providing tools and best practices to empower their oversight.
  • On-going Training and Third-Party Oversight
    • We deliver tailored compliance training programs, coupled with monitoring systems for vendor compliance, to keep stakeholders aligned with regulatory expectations.

By embedding these capabilities, Vigilant helps minimize the risk of regulatory missteps protecting your Firm from fines, reputational harm, and operational disruptions.

In summary, this RIA’s case serves as a sharp reminder: marketing must be substantiated, records must be complete and accessible, and compliance efforts must be active and effective. With Vigilant, firms gain the structure and support needed to build, implement, and sustain a compliant, resilient operation.

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